Giles Coghlan LLB, Lth, MA
Financial Source
The market communicates its mood not only through price but also through volume. This is one message that you really need to pay attention to as volume is a confirmation or a contradiction of price, particularly at certain times.
The message of high volume
The best way to understand high volume is to think of high volume like SOMEONE IS SHOUTING. High volume is like using CAPS LOCK when you are typing. The simple relationship between price and volume is like this:
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Rising price, rising volume = Increasing demand (bullish).
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Rising price, falling volume = Decreasing demand (bearish).
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Falling price, rising volume = Increasing supply (bearish).
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Falling price, falling volume = Decreasing supply (bullish).
How to view volume?
There are many different ways to view volume on a chart, but one of the simplest ways is to just have volume displayed under the price. The interpretation of price is then complimented by volume. Is volume rising or falling with the price? Is this breakout supported with high volume? Remember, volume validates price and a big fundamental shift in the markets accompanied by high volume is a huge vote of confidence. So, if you have not been consulting volume when trading stocks you have been missing out on a key piece of analysis. If you look at the chart below you can see the volume plotted underneath the price.
There are other ways to have volume displayed like using volume profile (very useful) and equivolume charts, but if you have not looked at volume before the simplest way is to look at the example seen here and start with that.
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Editors’ Picks
EUR/USD bounces toward 1.1750 as US Dollar loses strength
EUR/USD returned to the 1.1750 price zone in the American session on Friday, despite falling Wall Street, which indicates risk aversion. Trading conditions remain thin following the New Year holiday and ahead of the weekend, with the focus shifting to US employment and European data scheduled for next week.
GBP/USD nears 1.3500, holds within familiar levels
After testing 1.3400 on the last day of 2025, GBP/USD managed to stage a rebound. Nevertheless, the pair finds it difficult to gather momentum and trades with modest intraday gains at around 1.3490 as market participants remain in holiday mood.
USD/JPY advances to near 157.00 on BoJ's cautious tightening
The USD/JPY pair trades in positive territory for the fourth consecutive day around 157.00 during the early European session on Friday. The cautious pace of the Bank of Japan’s (BoJ) monetary tightening weighs on the Japanese Yen (JPY) against the Greenback. Traders will take more cues from the US Nonfarm Payrolls (NFP) report for December, which is due next week.
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Top 10 crypto predictions for 2026: Institutional demand and big banks could lift Bitcoin
Bitcoin’s (BTC) adoption story is unraveling and the king crypto could see institutional demand return in 2026. Crypto asset managers like Grayscale are betting on Bitcoin’s rally to a new all-time high next year, and themes like Bitcoin as a reserve asset are emerging.
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